LLG Blog

Shhhhhhhh

This is a silent trust, let’s keep it quiet!

Generally, estate planning advisors recommend that you be upfront with family members about how you plan to divide your assets. For example, you might hold a family meeting or write a letter to accompany your will. However, if you’re using a “silent trust,” sometimes referred to as a “quiet trust,” you’ll have keep it to yourself.

A silent trust limits the amount of information shared with beneficiaries or, in some cases, keeps the existence of the trust secret. This trust type offers many benefits, but also a few drawbacks.
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The CARES Act

Recent tax law changes may affect your estate plan

The Coronavirus Aid, Relief and Economic Security (CARES) Act is designed to provide immediate tax relief to individuals and businesses struggling to make ends meet due to the novel coronavirus (COVIOD-19) pandemic. But this law may also have a long-reaching impact on your estate plan. Notably, the CARES Act includes several provisions for participants in qualified retirement plans and IRA that could span generations.

Required minimum distributions

Most individuals are familiar with the basic rules for required minimum distributions (RMDs). Generally, you must begin taking RMDs from qualified plans and traditional IRAs after attaining a specified age.
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ESTATE PLANNING PITFALL

You haven’t created a road map for your estate plan

You’ve probably spent a lot of time creating documents for your estate plan, including a will, trusts and a power of attorney. While these documents are essential for your plan, your family could also use a “road map” to navigate the aftermath.

Typically, the road map will be in the form of a “letter of instructions” or similar missive that isn’t legally binding. But it can still be a valuable source of information during trying times. This is especially true if your family is devastated by a loss due to novel coronavirus (COVID-19) or some other unexpected calamity.
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BREATHE NEW LIFE INTO A "BROKEN" TRUST BY DECANTING IT!

Building flexibility into your estate plan using various strategies is generally advised. The reason is that life circumstances change over your lifetime, specifically changing tax laws and family circumstances. This is especially true during the novel coronavirus (COVID-19) pandemic. One such strategy to consider is decanting a trust.

Defining “decanting”

Decanting is pouring wine or another liquid from one vessel into another.
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THE CARES ACT

Recent tax law changes may affect your estate plan

The Coronavirus Aid, Relief and Economic Security (CARES) Act is designed to provide immediate tax relief to individuals and businesses struggling to make ends meet due to the novel coronavirus (COVIOD-19) pandemic. But this law may also have a long-reaching impact on your estate plan. Notably, the CARES Act includes several provisions for participants in qualified retirement plans and IRA that could span generations.

Required minimum distributions

Most individuals are familiar with the basic rules for required minimum distributions (RMDs). Generally, you must begin taking RMDs from qualified plans and traditional IRAs after attaining a specified age.
Read more . . .

THE CARES ACT CREATES CHARITABLE TAX INCENTIVES

Many individuals incorporate charitable giving into their estate plans, providing assistance to their favorite charities while preserving sufficient assets for their heirs. Typically, the charitable donations are structured to maximize the tax benefits on the books.

Now, the Coronavirus Aid, Relief and Economic Security (CARES) Act increases those tax incentives. Under the CARES Act — adopted to address the fallout from the novel coronavirus (COVID-19) pandemic — taxpayers of all stripes may realize additional tax savings from charitable donations in 2020.

New deduction for nonitemizers

Do you still itemize tax deductions on your federal tax return? It can make a big difference in how you approach charitable giving.
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TAKE THE PROPER STEPS TO INSULATE YOUR ESTATE FROM CREDITORS

For years, you may have viewed estate taxes as the main threat to your family fortune, especially if you own a successful business or valuable real estate. But with the federal gift and tax exemption set at $11.58 million for 2020, estate taxes likely are no longer a concern.

Today you may be more concerned with protecting your estate from creditors and lawsuits. There are several ways to accomplish this objective in accordance with prevailing state laws.
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ESTATE PLANNING PITFALL

Your Charitable Gifts are Unrestricted

If you’re making sizeable donations to charity as part of your estate plan, your good intentions are clear. But how do you know the funds will be used to further the charity’s mission? There are no absolute guarantees.

For instance, a financially sound charitable organization could begin experiencing economic difficulties and eventually file for bankruptcy or even halt operations. In that case, your donations may be used by the charity to pay off creditors or be allocated to some other purpose you hadn’t envisioned — and no one is going to ask your permission.

Fortunately, however, you can take steps to preserve your charitable legacy.
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HOW DOES THE SECURE ACT AFFECT ESTATE PLANNING?

The Setting Every Community Up for Retirement Enhancement (SECURE) Act is the biggest retirement planning law in decades. However, when all is said and done, the new law may have just as significant an impact on estate planning, especially if younger individuals are in line to inherit IRA or qualified retirement plan accounts.

Key Secure Act Provisions

The SECURE Act includes noteworthy provisions for both individuals and businesses. (See “Nothing personal, strictly business” at X for business-related provisions.) Here’s a summary of the key tax law changes for individual retirement-savers.
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HSAs

Understanding the Health Savings and Estate Planning Benefits

In addition to being a viable option to reduce health care costs, a Health Savings Account (HSA) can positively affect your estate plan because its funds grow on a tax-deferred basis. An HSA is similar to a traditional IRA or 401(k) plan in that it’s a tax-advantaged savings account funded with pretax dollars. Funds can be withdrawn tax-free to pay for a wide range of qualified medical expenses.

ABCs of an HSA

To provide these benefits, an HSA must be coupled with a high-deductible health plan (HDHP). For 2020, an HDHP is a plan with a minimum deductible of $1,400 ($2,800 for family coverage) and maximum out-of-pocket expenses of $6,900 ($13,800 for family coverage).
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